Federal Deductibility and Local Property Tax Rates

Douglas Holtz-Eakin and Harvey Rosen ()

No 2427, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In current discussions of tax reform in the United States, there is considerable controversy concerning the effects of allowing individuals to deduct state and local taxes when calculating their federal income tax liability. Recent econometric work has suggested that federal deductibility of state and local taxes has raised the proportion of these taxes -- especially property taxes -- in local budgets. This paper lends additional support to these earlier findings by showing that one channel through which deductibility leads to higher local property tax revenues is by increasing the rate of local property taxation. Specifically, we find that if deductibility were eliminated, the mean property tax rate in our sample of 82 communities would fall by 0.00715 ($7.15 per thousand dollars of assessed property), or 21.1 percent of the mean tax rate.

Date: 1987-11
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published as Journal of Urban Economics, Vol. 27, No. 3, pp. 269-284, (May 1990).

Downloads: (external link)
http://www.nber.org/papers/w2427.pdf (application/pdf)

Related works:
Journal Article: Federal deductibility and local property tax rates (1990)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:2427

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2427

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().